Client Alert: Corporate Transparency Act
Trust Company of Vermont would like to alert you to the new Corporate Transparency Act (CTA), which went into effect on January 1, 2024. This law was enacted to provide law enforcement with beneficial ownership information for certain business entities. It requires millions of companies to report information about the individuals who ultimately own or control such business entities.
The scope of the CTA is surprisingly broad. If you own even a small or inactive business entity, the CTA may apply to you. Failure to meet CTA reporting requirements may result in serious civil and/or criminal penalties.
More specifically, if you are currently a partner, member, owner or manager of a business entity (such as an LLC, or another domestic or foreign privately held company operating in the US), or if you form a new business entity in 2024, you likely must comply with the CTA. In this case, you will be required to file a “Beneficial Ownership Information Report” (BOI Report) online with the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the U.S. Department of the Treasury. Companies subject to reporting requirements under the CTA are known as “reporting companies.” Reporting companies likely also have a filing requirement any time there is a change in beneficial ownership for the business entity, a change in address of the entity or of anyone who owns or controls it, or other substantive changes to the entity and/or information of the underlying individuals who own or control it.
For reporting companies already in existence prior to January 1, 2024, the initial report is due by January 1, 2025. For reporting companies created or registered on or after January 1, 2024, the initial report is due 90 calendar days after the entity is created or registered. For reporting companies created or registered on or after January 1, 2025, the initial report is due 30 calendar days after the entity is created or registered. Please note that, if a reporting company is owned by a trust, the beneficial owners about whom beneficial ownership information must be reported may include the Grantor or Settlor, the Trustee, and certain types of beneficiaries.
Trust Company of Vermont will not be preparing CTA filings, but we want you to be aware of the new requirement due to its broad scope and the potentially severe penalties for noncompliance.
To determine if you must comply with the CTA, refer to the following website for information: fincen.gov/boi or contact the attorney who helped form your entity or your current attorney.
If you do not have an attorney and need help to locate a qualified attorney, please be in touch. If Trust Company of Vermont, as Trustee, is a beneficial owner of a reporting company for which you must file a BOI Report, we will provide our FinCEN Identifier upon request.